Story Stocks^®

Alibaba (BABA) is trading sharply higher after the company announced that its newly relaunched Qwen app, formerly called Tongyi, has surpassed 10 mln downloads in just one week of public beta. The free app is available in China via mobile and web, with an international version coming soon, and BABA plans to integrate agentic-AI features to support shopping and personalization across platforms like Taobao.

• Qwen’s fast adoption marks BABA’s most aggressive move yet to compete directly with ChatGPT, Google’s (GOOG, GOOGL) Gemini, Perplexity, and other global GenAI leaders.
• The company is backing this push with massive investment. In September, BABA committed RMB 380 bln (approx. $53 bln) to AI over three years — a level on par with, or exceeding, annualized AI infrastructure spend from U.S. hyperscalers like Amazon (AMZN), Meta Platforms (META), and GOOG, and far above the scale of OpenAI itself.
• These investments are already driving results. In 1Q26, Cloud Intelligence revenue surged 26% yr/yr to RMB 33.4 bln, aided by strong demand for compute and cloud services supporting AI workloads.
• AI product revenue posted triple-digit growth for the eighth straight quarter, showing robust enterprise adoption across China.
• The main drawback is that cloud margins remain slim, with adjusted EBITDA of just RMB 2.95 bln in Q1, reflecting the cost intensity of AI infrastructure build-out.

Briefing.com Analyst Insight:

BABA’s Qwen momentum illustrates how quickly China’s tech giants are mobilizing to narrow the generative-AI gap with U.S. players. The early traction is meaningful because it demonstrates real consumer uptake at a time when many Chinese AI apps have struggled to differentiate themselves. Still, the investment burden is high: BABA’s planned RMB 380 bln in AI spending puts it in the same league as AMZN and META -- companies expected to invest $30–$50+ bln per year in AI-related infrastructure -- and well above what most standalone AI labs can match. The payoff is showing up in Cloud’s accelerating top line, but profitability remains challenged and will stay under pressure as BABA prioritizes scale. For U.S. rivals such as GOOG, META, and AMZN, Qwen’s early success reinforces that global GenAI competition is broadening, especially in consumer-facing applications and commerce-focused agentic features.